Ben’s Holiday Spending Tips

Some random thoughts as we head into one of the busiest spending seasons of the year…

Take advantage of credit card sign-up bonuses. The credit card companies are notorious for changing up their rewards systems over time but if you can take advantage of a one-time sign-up bonus it’s basically free money.

The majority of these offers requires you spend a certain amount of money in the first 3 months or so, typically in the $1,000 to $3,000 range, which makes it more feasible to pull off around all the holiday spending without having to change up your main credit cards for all other bill payments. Many of these sign-up offers are good for a few nights at certain hotel chains, a round trip plane ticket or two, or the equivalent of hundreds of dollars.

The other advantage of using a new card for all of your holiday spending needs is it makes your life easier in terms of tracking expenses. One of the biggest downsides to using a credit card instead of cash is that it doesn’t feel like you’re spending money, especially when you can simply press a button to use your saved card information on your computer when buying things online. This is how spending gets out of control.

One of the biggest reasons people have a hard time saving money is because they never bother to track their spending in the first place. It’s impossible to develop good saving habits if you have no idea where all your money is going in the first place. Compartmentalizing your spending sources can help.

Obviously, this only applies to people who can handle the responsibility of paying off their credit card balance to see these benefits but if the credit card companies are going to compete for new users with these types of offers it makes sense to use them strategically on occasion. I like and The Points Guy to find the best offers.

Do your research. There are a number of deal aggregators on the web that will show you the best Black Friday and online holiday deals. I’ve always been partial to over the years to find the best prices on a wide range of items from electronics to clothes to stuff around the house.

Do you know why it’s called Black Friday? Urban legend has it the reason the day after Thanksgiving is called Black Friday is that it’s around holiday time that retailers finally go from operating at a loss (in the red) to operating at a profit (in the black).

Supposedly, the actual explanation it was initially called black Friday back in the 1960s is that people were talking about how bad the traffic was with all of the would-be shoppers on the roads. In fact, speculation has it that police officers were the first ones to use the term because the roads were such a disaster the day after Thanksgiving.

Avoid the stores and buy everything online. If it’s really called Black Friday because of the roads my simple solution would be to do all of your shopping online. I would be perfectly content with never setting foot in a single store or mall in the months of November or December for the rest of my life.

Online shopping is so much easier now. No parking. No dealing with crowds of people who don’t understand which direction to walk. No long lines. No people texting and walking in front of you.

And if you buy something online you don’t even need to track down a box to wrap your presents in or break down all of your Amazon boxes. Win-win.

Plus this way you don’t end up in a YouTube clip for all of eternity getting trampled running into Wal-Mart.

Be nice to service professionals. If you do venture out into the cold to go shopping try to be nice to the people working at the stores. Holidays can be stressful, making it easier to take things out on retail employees when dealing with crowds of people (I’m sure I’ve been guilty of this in the past) but I can’t imagine how insane it must be to work at one of these places during the holidays.

TVs have become insanely cheap but don’t waste your time on the best model. I’m in the market for a new flat screen TV. I probably bought my last one 3 or 4 years ago and every time I go through the process I’m amazed at how far the prices have come down since the last time. I do like to read the reviews (wirecutter is pretty good for these) to make sure I don’t buy a defective model that has a glaring weakness.

But after going through this process a few times and looking at the older models I currently own I’ve realized there are diminishing returns the higher you go up in screen quality and price. At a certain point going for the absolute best picture doesn’t offer more bang for your buck. I’m fine sticking with the mid-tier models on this one.

How about 529 contributions as presents? Maybe I’m projecting here because I have 3 kids to send to college someday but wouldn’t it be great if we could take, I don’t know, say 25%-35% of what we spend on toys for our kids and instead put that money into their college fund?

Unrealistic? Probably. A good idea? Yeah, probably (but again I’m biased).

Consider giving to charity (if you can).  My wife and I decided to stop giving each other gifts years ago and celebrate in other ways (a nice dinner out is always nice when you have 3 kids). At first, I thought this was a trap but we’ve actually transitioned what would have been spent on each other to our favorite charities at Christmas time.

One of the reasons we’re doing this is for our kids. Ron Lieber’s book The Opposite of Spoiled made me cognizant of the importance giving to others can have on your children’s character. My hope is to have them pick their own charity to give to or volunteer at around the holidays when they’re old enough. This is potentially a great way to counterbalance the insane amount of spending most people do around the holidays.

Further Reading:
How to Teach Your Children About Money